Financial Inclusion as the Driver of the Economic Growth: What the Government, Businesses and the Public Need to Do

12 June2019

Press Release

On 12 June, Kyiv UNIT.City
the first Ukrainian innovation park hosts the second internal Forum on
Financial Inclusion: Leaving No One Behind. As last year, the Forum was co-organized by the National Bank of Ukraine (NBU), market
players, and international partners. This year’s event brought together
speakers from Australia, India, Kenia, Norway, Poland, the UK, the US, Turkey,
and over 300 guests of the forum, such as, officials, entrepreneurs, experts,
educators, and civic activists.

The Forum was honored
with the statement of HM Queen Maxima of the Netherlands serving as the UN
Secretary-General's Special Advocate for Inclusive Finance for Development
(UNSGSA), Honorary Patron of the G20's Global Partnership for Financial
Inclusion (GPFI), and Honorary Chair of the Dutch Money Wise Platform. HM Queen
Maxima is a leading global voice on advancing universal access to and
responsible usage of affordable, effective and safe financial services.

“On a global level, we have witnessed policy makers and the private sector
contribute to rapid progress by harnessing the power of digital technology and
finding solutions together. I encourage all stakeholders — both from the public
and private sectors — to collaborate as each of us search for ways to fuel
economic growth in Ukraine and abroad, as well as to improve the financial
lives of everyone,” urged HM Queen Maxima of the
Netherlands in her written
addressto the Forum participants. Eduard Hoeks, the Netherlands Ambassador to Ukraine, read
the statement.

Along with HM Queen Maxima, a welcoming speech was delivered by Susan Fritz, USAID Mission
Director to Ukraine, Belarus and Moldova. “Financial sector development
is not simply an outcome of economic growth; financial sector development fuels
economic growth. To achieve sustainable economic growth, Ukraine needs a
well-developed and inclusive financial sector,” said Susan K. Fritz, USAID
Regional Mission Director to Ukraine and Belarus.

NBU Governor YakivSmolii presented the keynote speech at the Forum.

“Financial inclusion multiplies possibilities of Ukrainians. Access to
loans advances business and access to insurance creates a safety cushion. At
the macroeconomic level this translates into the
country’s capacity to tackle crises. At a personal level, it gives Ukrainians a
chance to be prepared for rapid changes and unexpected developments that have
permeated the life of our country for the past two decades,” NBU Governor YakivSmolii focused on the
positive outcomes of improved accessibility of financial services.

What are the areas that require more
efforts from Ukraine? Organizers suggest to consider
this issue at discussion panels.

Financial Inclusion: Global Trends and
Practices

“The key success factor in involving people in the financial system is
cooperation of business with the state. Today, the cashless infrastructure of
the country develops exponentially, and smart city solutions generated by
partnerships on integrating payments in the city infrastructure, often become
the driver for cashless life style. We see a lot of potential from introducing
digital solutions for the development of the cashless economy. According to the
MasterCard Digitalization Trust Survey 2019, Ukrainians are very open to
innovations and even outpace some European countries: 87% of our fellow
citizens are willing to pay with their smartphones, 58% of Ukrainians already
use pay apps and this is one of the highest rates in Europe. We put a lot of
effort in introducing technological solutions for stimulating more Ukrainians
to favor cashless payments and engage in the financial system,” noted Inga Andreieva, Country Manager of MasterCard in Ukraine and
Moldova.

Access to and Usage of Financial
Services by All: Whose Responsibility?

“Trust is an important factor in using financial services. In order to
improve trust and advance financial inclusion the NBU sets new standards for
protection of financial service consumers’ rights. We are initiating a new
regulation. Three main steps towards implementation of the new regulation:
drafting new regulation of customer/financial services provider relationship;
establishing a new unit at the NBU that will handle public requests, as well as
launching a Call-Center and a Single Customer Support Center, so that they
could receive prompt replies to their questions,” said NBU Deputy Governor
Roman Borysenko.

Financial Literacy: Helping Ukrainians
Be in Control of Their Financial Lives

“A national strategy for financial literacy is being implemented already in
50 countries. Positive outcome of the national approach does not cast any
doubt, since countries that were the first to implement actions based on the
strategy make up most of the leaders in financial literacy. A financial
literacy strategy common for the entire financial sector was
long awaited by the market players. At present, based on major outcomes
for the last 5 years, the NBU as the leader of the financial sector reform
among state agencies presented its vision for the future. Most importantly, the
strategy is intended to give Ukrainians specific skills and expertise for a
successful financial life and private financial stability,” noted NBU Director
of Communications Department NataliiaBondarenko.

Business and Innovations: a Tandem of
Both the Government and Industry

“According to the World Bank survey, a third of Ukraine's population are
left out of the financial system. Regarding the economically active population
according to Visa, three main trends can be singled
out that favor financial literacy. First, effects of barriers in using cashless
payment at the financial literacy level, for example associated with security.
Second, accessibility of cashless payments, i.e., the option to pay using
contactless devices for transport develops a habit and fosters on overall
increase in contactless payments. And third, the quality of interaction and
functionality of on-line and mobile banking and information that a consumer
receives from the issuing bank,” said Vira PLATONOVA,
Senior Vice President, Visa Group Country Manager for CIS and South East
Europe.

At the Forum
the NBU will declare its intentions to advance efforts on consumer rights
protection and will present to the market its vision of the strategy for
financial literacy.

Forum organizers: the NBU, the USAID Financial Sector
Transformation Project, and the MasterCard and Visa companies.

The forum is a platform for debate about the availability
of financial services in Ukraine, for the exchange of ideas between state
authorities, businesses and nongovernment institutions, and for agreeing
further steps towards creating a financially inclusive Ukrainian society.

The NBU identifies financial inclusion
as one of its strategic goals. Financial inclusion means creating conditions
that encourage all segments of the population to use various financial services
that are accessible, affordable, regulated, and fitting their needs in order to
stimulate economic growth and reduce inequality in society.

Under the OECD/INFE
working definition, financial inclusion refers to the process of promoting
affordable, timely, and adequate access to regulated financial products and
services and broadening their use by all segments of society through the
implementation of tailored existing and innovative approaches, including
financial awareness and education, with a view to promoting financial wellbeing
as well as economic and social inclusion.